Burberry burns £28M of own product to protect high-class status

A shopper carries a Burberry bag in central London, Britain, November 3, 2017. Picture taken November 3, 2017.
Reuters/Toby Melville

Burberry would rather burn millions than let its products go to the masses. The British luxury house deliberately destroyed its unsold clothes, accessories and perfumes worth £28.6 million (AU$50.54 million) last year to prevent them from being sold cheaply or pirated.

The move is meant to protect its status of being an upmarket brand. For the last five years, it has burned products worth £90 million (AU$160 million). The company was concerned that unauthorised sales of its products damages its image and its profits.

“Counterfeiting and parallel trade in the marketplace can reduce the demand for genuine Burberry merchandise and impact on revenues,” its annual report states. “Allegations from third parties of IP infringement by Burberry could result in significant damages claims, financial loss through withdrawing infringing products and negatively impact Burberry’s reputation.”

Burberry also had to dispose of £10 million (AU$17.7 million) worth of old products, mostly perfume, as it has already signed a new deal with Coty and the multinational beauty company would be making new stock.

The practice has angered environmental groups and its own shareholders, who questioned why the products were not offered to private investors instead. Lu Yen Roloff of Greenpeace said the company could have just slowed down its production to avoid overstocking, but instead it opted to overproduce and incinerate unsold products.

“It’s a dirty secret of the fashion industry,” she said (via the BBC). “Burberry is just the tip of the iceberg.”

London-based Women in Business group also called the practice “outrageous” that needs to stop immediately. It has called for the boycott of the brand.

But Burberry claimed that the burning of the products was done in an environmentally friendly way.

“Burberry has careful processes in place to minimise the amount of excess stock we produce. On the occasions when disposal of products is necessary, we do so in a responsible manner and we continue to seek ways to reduce and revalue our waste,” a company spokesperson said.